House votes to lift debt ceiling until May
The House of Representatives voted on Wednesday to suspend the US debt ceiling until May, averting a potential default crisis and buying time for high-stakes budget negotiations.
The bill now goes to the Senate where it is expected to pass and then be approved by President Barack Obama, defusing tensions as Democrats and Republicans struggle to reach a deal to rein in deficits and debt.
The United States surpassed its congressionally-mandated $16 trillion borrowing limit late last year, and the Treasury has taken extraordinary measures to keep paying the government’s bills until late February.
Republicans had initially sought to tether an extension of the debt ceiling to spending cuts, threatening a repeat of last summer’s tense standoff and elevating the risk of a potentially catastrophic default.
Last summer’s showdown over the debt limit led to the unprecedented decision by Standard & Poor’s to downgrade the once-sterling US credit rating.
But Obama had said he would refuse to negotiate over the debt ceiling, and the suspension grants divided lawmakers an extra three months to try to reach a broad agreement on boosting revenue and reining in spending.
The Republican-introduced measure passed 285-144, with bipartisan support.
In a bid to hasten action, House Republicans added a clause to the bill to keep senators from collecting their salaries if they don’t pass a budget by April 15.
“It’s been nearly four years since the Senate has done a budget. Most Americans believe, if you don’t do your job, you shouldn’t get paid. That’s the basis for No Budget, No Pay,” House Speaker John Boehner said Tuesday.
“It’s time for us to come to a plan that will in fact balance the budget over the next ten years. It’s our commitment to the American people.”
The bill would not eliminate lawmakers’ pay in the event a budget is not passed, but set the money aside in an escrow account until a budget is passed or until the last day of the 113th Congress, at the end of 2014.
If the bill is passed by the Senate and signed by the president, the current debt limit would be automatically extended as necessary until midnight, May 18.
The Democratic-held Senate has not voted on a budget since 2009, and the federal government is being funded through temporary resolutions every six months.
Lawmakers haggled for months over how to avoid the so-called “fiscal cliff,” in which taxes were set to go up on everyone on the first day of 2013 and massive automatic spending cuts would kick in if Congress failed to act.
Marathon negotiations late last month produced only a partial settlement, with taxes rising on only the very wealthy and lawmakers delaying until March any deal on avoiding spending cuts set to hit defense and domestic programs.